Chapter 05, Problem 003 (Video Solution) Eddie's Precision Machine Shop is insured for $700,000. The...
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Chapter 05, Problem 003 (Video Solution) Eddie's Precision Machine Shop is insured for $700,000. The present yearly insurance premium is $1.00 per $100 of coverage. A sprinkler system with an estimated life of 20 years and no salvage value can be installed for $45,000. Annual maintenance costs for the sprinkler system are $900. If the sprinkler system is installed, the system must be included in the shop's value for insurance purposes, but the insurance premium will reduce to $0.40 per $100 of coverage. Eddie uses a MARR of 15 %/year. Click here to access the TVM Factor Table Calculator X Your answer is incorrect. Try again. -25,471 What is the annual worth of this investment? Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is 5
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